Leading the Transformation - Analyst and Investor Call H1 Volkswagen AG 29 July 2021
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Leading the Transformation. Analyst and Investor Call H1 Volkswagen AG 29 July 2021
Disclaimer
The following presentations as well as remarks/comments and explanations in this context contain forward-looking statements on the business
development of the Volkswagen Group. These statements are based on assumptions relating to the development of the economic, political and
legal environment in individual countries, economic regions and markets, and in particular for the automotive industry, which we have made on the
basis of the information available to us and which we consider to be realistic at the time of going to press. The estimates given entail a degree of
risk, and actual developments may differ from those forecast. Any changes in significant parameters relating to our key sales markets, or any
significant shifts in exchange rates or commodities relevant to the Volkswagen Group or deviations in the actual effects of the Covid-19 pandemic
from the scenario presented will have a corresponding effect on the development of our business. In addition, there may be departures from our
expected business development if the assessments of the factors influencing value enhancement and of risks and opportunities presented develop
in a way other than we are currently expecting, or if additional risks and opportunities or other factors emerge that affect the development of our
business.
We do not update forward-looking statements retrospectively. Such statements are valid on the date of publication and can be superseded.
This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.
2
Analyst & Investor Conference Call H1 2021
Herbert Diess Arno Antlitz Helen Beckermann
Chairman of the Chief Financial Officer Head of
Board of Management Volkswagen AG Group Investor Relations
Volkswagen AG Volkswagen AG
3
In a nutshell: very strong first half of the year 2021
Strong Q2 performance E-Mobility ramp-up
in challenging environment gains further momentum
NEW Auto Updated guidance
paves the way to 2030 amid product momentum & cost cuts
4
All brand groups contributed to strong H1 performance
Volkswagen Group1 Deliveries to Customers, January to June 2021 vs. 2020
Volume Premium Sports Truck & Bus
Hardware
Software
+24.2% +38.8% +31.4% +62.7%
Battery &
Charging
Mobility &
Services
Group: +27.9%
1 Excluding Ducati
5
In Europe and North America, Volkswagen Group gains market share1
Growth y-o-y, January to June 2021 vs. 2020
North America2 World2 Central & Eastern Europe
Car Market VW Group Car Market VW Group Car Market VW Group
45.1% 29.1% 27.2%
33.4%
28.4% 29.0%
South America2 Western Europe Asia Pacific
Car Market VW Group Car Market VW Group Car Market VW Group
+40.0% +39.7% 31.3%
27.6%
28.9%
16.8%
1 Volkswagen Group Passenger Cars excl. Volkswagen Commercial Vehicles 2) incl. LCV in North America & South America
6
E-Mobility gaining momentum – BEV sales to further accelerate in H2
Deliveries by regions and brands January to June 20211
[Thsd units]
Others Others
Porsche
China 6,062 450
19,822 (0%)
18,285 (4%)
(12%)
(11%)
ŠKODA
17,697
USA 18,514 (10%)
(11%)
6,172
SEAT
170,939 (4%) 170,939 92,859 VW Passenger
(54%) Cars
32,775
128,078
(19%)
(75%)
Audi
1,164
Europe
(1%)
VW Commercial
Vehicles
1 Europe: EU 27+2+UK, China: Incl. HK
7
VW Group Strategy
Group lays foundation to tap into future profit pools
Volume Premium Sports
ID.4 Enyaq iV Q4 e-tron SSP
Hardware
Software
Battery &
Charging
Mobility &
Services
ID.4 - power consumption in kWh/100 km (combined): 16.9-15.5 (NEDC); CO2-emissions in g/km: 0 (combined); efficiency class: A+; Enyaq iV - power consumption in kWh/100 km (combined): 16.0-14.4 (NEDC); CO2-emissions in g/km: 0 (combined); efficiency class: A+;
Q4 e-tron - power consumption in kWh/100 km (combined): 17.3-15.8 (NEDC), 19.0-17.0 (WLTP); CO2-emissions in g/km: 0 (combined); efficiency class: A+; ID.Buzz - Concept Car
8
Europcar deal provides compelling opportunity to create a leading mobility platform
Consortium of Accelerated delivery of mobility services targets
• Customers increasingly demand new and
innovative on-demand mobility solutions, such
as subscription and sharing models
Interaction at
Green Mobility Holding
“arms’ length” • Building a leading mobility platform is a key
priority of NEW AUTO strategy through 2030
Irrevocable tender commitments from
shareholders representing 68%
€0.50 per share • Leveraging the strong transformation
Offer price will increase to €0.51
if acceptance of >90% reached capabilities of Attestor as well as the
international mobility services and customer
• Leading market position experience of Pon
• Advanced fleet • Develop and transform Europcar’s business
management capabilities and selectively add further services from
• Broad network of stations Volkswagen Group brands
29/7/21 9
VW Group Strategy
Holistic mobility experience for customers
Business
Commute Trip
Meeting
Weekend Getaway
Daily trip
to work with Use leased car to
subscribed Sport get to client
vehicle
Rent a van
Private Customer Business Customer User Chooser
Mobility Platform
Frontend
IT Platform
Brand Offer Group Offer Third Party Offer
Taxi Service
Rental Subscription Sharing … …
Mobility Unit
10VW Group Strategy
Continuing trend from ownership to usage of services
Usage
Ownership / Leasing Subscription Rent a Car Carsharing
Financing (6-36 months) (1-12 months) (days to weeks) (minutes to hours)
Rental as operational basis
(sustainable margin >10%, network and operations already financed)
Mobility unit
Source: BCG "Mobility and Subscription", Feb 2021
11Financial Highlights – Volkswagen Group
January to June 2021 vs. 2020 vs. 2019
Vehicles Sales H1 Sales Revenue H1 Operating Profit1 and Margin H1
[mil. vehicles] [€ bn ] [€ bn] Margin [%]
8.0% -0.8% 8.8%
5.3 125.2 129.7 11.4
4.7 10.0
3.7 96.1
2019 2020 2021 2019 2020 2021
-0.8
2019 2020 2021
1 before Special Items
12Strong Automotive Cash Flow development
Safeguarding liquidity to finance future
Reported Net Cash Flow 'Clean' Net Cash Flow1 Net Liquidity
[€ bn] [€ bn] [€ bn]
+16.4
35.0
26.8
12.3 18.7
10.2
6.9
5.6
30.6.20 31.12.20 30.6.21
-2.3
-4.8 H1/2019 H1/2020 H1/2021
H1/2019 H1/2020 H1/2021
1 Reported net cash flow before M&A and Diesel
13Automotive Division – Analysis of Net Liquidity1
January to June 2021
[€ bn]
Reported Net Cash flow (€ 10.2bn)
1.5 -0.6 -1.5
-1.2 0.0 -0.7
10.9
26.8
Clean Net
Cash flow
(€ 12.3bn)
35.0
31.12.20 Operating Dividend of Diesel M&A Hybrid Capital Dividend to Other 30.6.21
Business Chinese JVs Outflow VW AG
Shareholder
1 All figures shown are rounded, minor discrepancies may arise from addition of these amounts
14EBIT per Key Business Areas
January to June 2021 vs. 2020 vs. 2019
Automotive Division Financial Services Division
Passenger Cars1 Commercial Vehicles Financial Services
EBIT [€ bn] incl. Margin [%] EBIT [€ bn] incl. Margin [%] EBIT [€ bn]
8.4% -2.5% 9.3%
7.2% -3.0% 2.5%
8.5
2.5
7.7
Incl. restructuring of
1.4
-0.7 € bn 1.2
1.0
0.3
…
-0.3 2019 2020 2021
-1.7 2019 2020 2021
2019 2020 2021
1 before Special Items
15Passenger Cars EBIT-Bridge
January to June 2021 vs. 2020
Passenger Cars1
EBIT [€ bn] incl. Margin [%] [€ bn] Z884JCRF Thereof
• Overhead Costs -0.4
Thereof
• Development Costs -0.6
-2.5% 9.3% • Volume +6.3 • One off effects/ Others -1.8
• Price/mix +2.4 (e.g. AID in 2020 -0.8)
8.5
0.2
1.7 -2.8
Thereof
• Commodity derivatives +1.7
11.2 (Absolute in H1/2021) 1.1
8.5
-1.7
Jan - Jun 20 Volume / Exchange Product Costs Fixed Costs Jan - Jun 21
-1.7 before Mix / Prices Rates / / Others
2020 2021 Special Items Derivatives
1 before Special Items
16Volkswagen Passenger Cars – Brand Groups Performance
January to June 2021 vs. 2020
Volume Group Premium Group Sport & Luxury Group
EBIT [€ bn] incl. Margin [%] EBIT [€ bn] incl. Margin [%] EBIT [€ bn] incl. Margin [%]
-5.2% 4.4% 3.0% 9.6% -3.1% 10.7% 10.2% 17.6%
1.773 3.113 2.660
974
228
1.143
-1.491 2020 2021 -643
2020 2021 2020 2021 2020 2021
-11.6% 13.4%
-7.2% -0.5% -7.9% 1.6% 178
87
-26
-271 -334 -99
2020 2021 2020 2021 2020 2021
17Commercial Vehicles EBIT
January to June 2021 vs. 2020
Commercial Vehicles/Trucks
EBIT [€ bn] incl. Margin [%] EBIT [€ bn] incl. Margin [%] Z884JCRF
+0.2 (3.4%) before
restructuring
Volume/Mix
-9.1% -7.1%
Fixed costs
-0.4 -0.5 Provisions for restructuring € -0.7 bn
-3.0% 2.5%
2020 2021
0.3
4.2% 12.0%
-0.3 0.9
2020 2021
0.2
2020 2021
18China Joint Ventures – Proportionate Operating Profit
[€ bn]
Drivers
H2 • Continued strong premium
4.4 H1 performance, especially
FAW-VW
3.6 • Q2 2021 stronger affected by
chip shortage
2.3
• Competition in lower volume
2.2 segment negatively impacted
brand Volkswagen and ŠKODA
• Upfront-Investment
2.1 SAIC Audi
1.4 1.3
• Catch up program SVW
initiated
2019 2020 2021
19Volkswagen Group – Outlook for 2021
2019 2020 2021
Deliveries to customers 11.0 9.3 NEW
Noticeably above prior year
'000 vehicles
Sales revenue 252.6 222.9
Significantly higher than the prior-year figure
€ billion
Operating return on 1 NEW
7.6 4.8
1
sales In the range of 6.0 % to 7.5%
%
Automotive NEW
Reported Net Cash flow 10.8 6.4 Much stronger than prior year2
€ billion
Automotive NEW
Clean Net Cash flow 13.5 10.0 > 15bn
€ billion
1 Before Special Items 2 Before Navistar
20Proof points of our Strategy
Strategic CFO Targets CFO Focus Areas
Focus on product transformation towards electric
Focused financial steering
of the transformation Digitalization: Advancing in software/services
(allocation of resources to future
topics) Groupwide cost & efficiency programs
Capturing group-wide synergies
Safeguarding and Managing margins and Cash Flows
strengthening
our financial foundation
(… for continued investments in
Acting based on integrity and values
future technologies such as
electrification, digital technology
and autonomous driving)
21BEV ramp-up pushing for scale effects
CFO Focus Areas
Focus on product transformation
towards electric Worldwide Deliveries to Customers
[thousand units] MEB share • Synergy projects progressing
Digitalization: Advancing in by scaling up MEB platform
software/services groupwide
VW ID.6, ŠKODA Enyaq iV,
Audi Q4 e-tron/Q4
Groupwide cost & efficiency Sportback e-tron
programs 111 • Group as market leader in the
EU, with a share of about 26%
60 in BEV deliveries
Capturing group-wide synergies • Over-the-air functionality for
>60%
ID family started in July with
>30%
regular updates
Q1/21 Q2/21 Q3/21 Q4/21
Managing margins and Cash
Flows
22Business model: Software is a key differentiator for the future, 100% commitment
to become Software-Enabled-Car-Company SCHEMATIC
CFO Focus Areas
Planned Business model CARIAD
Focus on product transformation
towards electric Software
Operating result Investment phase Income phase
development
in brands R&D through licenses
[€ bn]
Digitalization: Advancing in H1/2021
Based on primary R&D costs
software/services
2020 2021 2022 2023
Groupwide cost & efficiency -0.5
programs
Net Cash Flow
[€ bn] • CARIAD currently included in 'Other line'1
Capturing group-wide synergies
H1/2021 • Brand R&D costs shifting to CARIAD
• H1 2021:
− R&D € 1.0 bn
Managing margins and Cash
Flows − ca. 4.5 k headcount
-1.1
1 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions
23Financing the transformation: Fixed cost program ahead of schedule, further progress
in Q21
CFO Focus Areas
Focus on product transformation Group wide Overhead Cost Program (without R&D / Capex)
towards electric [€ bn] ~ -10%
~ -8% H2
Digitalization: Advancing in H1
software/services
Savings
Groupwide cost & efficiency increased in Q2
programs
Capturing group-wide synergies
20.0 18.5
Managing margins and Cash Actual Base FC Target
Flows 2019 2020 2021 2023
1 All figures shown are rounded, minor discrepancies may arise from addition of these amounts
24Capturing Groupwide Synergies - especially in Capex well under way
CFO Focus Areas
Focus on product transformation
towards electric R&D / Capex – Absolute and Ratio (Automotive Division)
[%] Capex R&D
Digitalization: Advancing in [€ bn] ∑ 14.1%
software/services (10.8 bn)
∑ ~11.5% ∑ 13%
(12.2 bn)
∑ 10.7%
~5.4% (11.5 bn)
Groupwide cost & efficiency (4.1 bn)
programs ~4.9% ~3.5% ~6%
(5.2 bn) (3.8 bn)
Capturing group-wide synergies ~8.7%
~6.6% ~7.2%
(6.7 bn) ~7%
(7.0 bn) (7.7 bn)
!
Managing margins and Cash H1/2019 H1/2020 H1/2021 Target FY 2021
Flows
25Focus on cash flow – all Group companies clearly positive (except CARIAD)
CFO Focus Areas
Focus on product transformation Net Cash Flow by Brands, € mil.
towards electric
Net Cash Flow (including Diesel Payout) Diesel Payout
Volkswagen Passenger Cars 400 (404)
Digitalization: Advancing in SEAT 356
software/services Škoda 678
Volkswagen Commercial Vehicles 290
Audi 5,512 (68)
Groupwide cost & efficiency Bentley 251
programs
Porsche Automotive 2,601
MAN Commercial Vehicles 327
Capturing group-wide synergies Scania Vehicles and Services 354
Other1 -579 (145)
Automotive Division Reported Net Cash2 10,191
Managing margins and Cash 1 Consolidation and other non-brand companies including CARIAD
Flows 2 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions
All figures shown are rounded, minor discrepancies may arise from addition of these amounts
26Overall ambition: Leading the transformation with integrity and based on our values
Strong brands
Financial strength
BEV
Integrity
Software
AI / mobility services
27Leading the Transformation. Backup
Volkswagen Group – Analysis by Business Line 1)
(January to June 2021)
Vehicle sales Sales revenue Operating profit Operating margin
thousand vehicles / € million / percentage 2021 2020 2021 2020 2021 2020 2021 2020
Volkswagen Passenger Cars 1.552 1.134 40.689 28.580 1.773 – 1.491 4.4% -5.2%
ŠKODA 463 372 10.199 7.546 974 228 9.5% 3.0%
SEAT 310 197 5.656 3.749 – 26 – 271 -0.5% -7.2%
Volkswagen Commercial Vehicles 188 157 5.298 4.238 87 – 334 1.6% -7.9%
Audi 602 416 29.212 20.476 3.113 – 643 10.7% -3.1%
Bentley 7 5 1.324 860 178 – 99 13.4% -11.5%
Porsche Automotive 2) 152 116 15.107 11.192 2.660 1.143 17.6% 10,2%
Scania Vehicles and Services3) 50 31 7.155 5.269 860 221 12.0% 4.2%
MAN Commercial Vehicles 77 47 6.405 4.669 – 456 – 423 -7.1% -9.1%
Power Engineering 4) – – 1.581 1.850 82 21 5.2% 1.1%
VW China5) 1.522 1.422 – – – – – –
Other 6) – 263 – 160 – 14.513 – 10.361 – 226 – 312 – –
Volkswagen Financial Services – – 21.556 18.063 2.339 1.155 – –
Volkswagen Group before Special Items – – – – 11.358 -803 8.8% -0.8%
Special Items – – – – - -687 – –
Volkswagen Group 4.660 3.736 129.669 96.131 11.358 – 1.490 8.8% -1.5%
Automotive Division 7) 4.660 3.736 107.027 77.015 8.841 – 2.738 8.3% -3.6%
of which: Passenger Cars 4.533 3.658 92.041 65.312 8.521 – 2.350 9.3% -3.6%
of which: Commercial Vehicles 127 78 13.404 9.854 334 – 295 2.5% -3.0%
of which: Power Engineering – – 1.581 1.850 – 14 – 93 -0.9% -5.0%
Financial Services Division – – 22.642 19.115 2.517 1.248 – –
1) All fi g
ur es sho w n ar eround ed, minor di scr epanci es may ari sefrom addi ti on of these amoun ts. 2) Por sc he (Au tomo ti vea nd Financial S er vi c es): sal esr even u e €16.525 (12.421) million, op era tin gprofi t €2.792 (1.233 ) million. 3) Scania (Au to moti veand Financial
S er vic es): sal es r even u e €7.377 (5.488) million, op era ti n gprofi t €960 (266) million. 4) Prior y ear includin gop era tion sfrom R enk 5) T he sal es r even u eand op era tin gprofi ts of the join t ven tur ecompani es in C hina ar eno tinclud ed in thefi gur es for the Group.
T hese C hin ese compani es ar eaccoun ted for u sin g the eq ui ty m etho d and r ecord ed a propor ti ona teop era tin gprofi tof €1.272 (1.404) million. 6) In op er a ti n gprofi t, mainly in tr a group i tem s r eco gniz ed in profi tor lo ss, in par ti cular from the el imina ti on of
in tercompany profi ts; the fi gur einclud es d epr eciati on and amor ti za ti on of id en tifiabl ea ssets a spar t of purc ha seprice alloca ti on, a swel l a scompani es no talloca ted to the brand s. 7) Includin galloca ti on of con solida ti on adju stm en ts b etw een the Au tomo ti ve
and Financial Services divisions. 24Automotive Division – Net Cash Flow Development 1)
(January to June 2021)
[€ bn]
19.1
-3.8
-3.7
11.7
0.1 10.2
-1.5
Cash flow from Capex Capitalized Other Net cash flow before Acquisition and Reported Net
operating activities development costs equity investments disposal of equity Cash flow
investments
1) All figures shown are rounded, minor discrepancies may arise from addition of these amounts. Including allocation of consolidation adjustments between Automotive and Financial Services divisions. 29/7/21 25Automotive Division – Net Cash Flow 1) (January to June 2021)
[€ billion]
12.3
1.5
10.2 0.6
Reported Net Cash Flow Diesel outflow Aquisition and disposal Clean Net Cash Flow
of equity investments
1) Including allocation of consolidation adjustments between Automotive and Financial Services divisions. 29/7/21 26Leading the Transformation. Appendix
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